Monopoly in the container shipping market: an econometric approach

PurposeSince the 2010s, market conditions for container shipping companies have been deteriorating owing to decreasing container cargo trade and increasing supply capacity. This study aims to contribute to the empirical literature on the container shipping industry market structure. Specifically, this study aims to investigate the extent of market competition.Design/methodology/approachThis study analyzes the market structure and evaluates the market power of shipping companies through a non-structural test.FindingsThe H-statistic for the entire period of 2004–2018 was 0.37, which is significantly different from zero. This indicates the absence of monopoly pricing throughout the entire period. For the time-phased estimates, the H-statistic between 2004 and 2008 is 0.15, which is not significantly different from zero. On the other hand, the H-statistic from 2009 to 2018 was 0.40, which differs significantly from zero.Originality/valueAs the Far East Freight Conference had released tariffs and charge rates by item for container shipping routes, monopolistic pricing is said to have appeared until the European Union abolished the European Economic Community (No. 4056/86) in 2008, before the economic crisis. However, this study indicates that pricing in the container shipping industry has been distinctly non-monopolistic; further, competition seems to have intensified since 2008. Industry competitiveness is of interest not only to academics but also to practitioners, including policymakers, especially when considering competition policies.

Inflation and Redistribution Processes in the Modern World

Research background: Inflation and redistributive processes are the main permanent threats to economic stability in the modern world and these processes are closely interconnected. Inflation is a powerful tool for redistributing national income, both consciously used by economic entities and generated within the economic system. Purpose of the article: To demonstrate the variety of mechanisms that connects inflation and redistributive processes in the modern economy. Methods: The dialectical-materialistic and concrete-historical method forms the methodological basis of research. The empirical basis of analysis is formed by statistical materials and specific economic and statistical studies. Findings & Value added: Monopoly power in all its manifestations is the first and key mechanism for redistributing social income through inflation processes. The dollar’s monopoly position in international settlements has long been one of the factors of global inflation processes and redistribution of the global public product in favor of the United States in the global economy. The highest degree of monopolization of Russian market is the main generator of Russian inflation and the reason of the disproportionate development of Russian economy. The state has the largest number of redistributive levers and quite often acts as a voluntary or involuntary initiator of inflation and redistribution processes. Inflationary expectations make a significant contribution to the formation of inflationary potential in the face of low confidence in the authorities, lack of information, political monopolism, and economic instability. This is manifested in advance overpricing for traded goods and services, interest rates, etc., which, in turn, may strengthen redistribution processes, especially in the context of monopolistic pricing.

Pricing in M/M/1 queues when cost of waiting in queue differs from cost of waiting in service

Service providers can adjust the entrance price to the state of the demand in real life service systems where the customers' decision to receive the service, is based on this price, state of demand and other system parameters. We analyzed service provider's short and long term pricing problems in unobservable M/M/1 queues having the rational customers, where, for customers, the unit cost of waiting in the queue is higher than unit cost of waiting in the service. We showed that waiting in the queue has a clear negative effect on customers’ utilities, hence the service provider's price values. We also showed that, in the short term, monopolistic pricing is optimal for congested systems with high server utilization levels, whereas in the long term, market capturing pricing is more profitable.

Searching for the Concentration-Price Effect in the German Movie Theater Industry

SummaryThe empirical relationship between market concentration and prices has been well established for a long time and for numerous industries. Recently it was confirmed for the US movie theater industry. This paper investigates, whether such a price-concentration relationship can be found on local cinema markets in Germany as well, focusing on up-to-date mainstream movies. First, we develop a model of monopolistic pricing and estimate its parameters using data of monopoly markets from a new set of German micro data. Then we apply the estimated model to simulate monopoly prices on local markets with two or more operators and compare them to the prices actually observed in these markets. We find no significant difference in admission prices, which puts our study in contrast to the results found on local US markets. Searching for an explanation, we test whether movie theater operators even though being located in the same geographic area, are local monopolists, but find no hint of that, either.